CIFF Shanghai has learned that in Q2 2026, the home decoration and building materials industry officially entered the stock competition phase, with the overall market showing steady growth and gradual bottoming-out recovery.

Data shows that in May, sales at large-scale building materials and home furnishing stores reached RMB 128.694 billion, up 15.07% month-on-month and slightly up year-on-year. Cumulative sales in the first five months saw a notably narrower decline compared to Q1, highlighting the industry's resilient recovery.

Supported by urban renewal plans and trade-in subsidy policies in multiple regions, old residential community renovation and existing stock home refurbishment have become the core growth engines. Market divergence continues to intensify: high-end eco-friendly and smart home decoration demand remains robust in first- and second-tier cities, while third- and fourth-tier cities remain mired in low-price homogeneous competition. Currently, over 60% of home decoration demand comes from partial renovation of old homes. Local home furnishing enterprises are gradually breaking free from price-based cutthroat competition by leveraging refined local services.

Consumers born in the 1980s and 1990s have become the main force in home decoration spending, with health, smart technology, and personalized customization emerging as the three mainstream consumption trends. Sales of ENF-grade eco-friendly panels and odor-free antibacterial building materials have risen sharply, as consumers increasingly prioritize environmental indicators in home decoration. Moisture-proof and mold-resistant primary materials adapted to humid regions have gained wide recognition. The smart home market is experiencing explosive growth, with whole-home interconnected smart solutions far outpacing individual smart products in popularity.

Customized demand for mainstream housing types now accounts for over half of the market, with whole-home storage solutions and age-friendly renovation seeing rapid growth. Local brands combine local housing type characteristics to provide one-on-one exclusive design, effectively addressing the industry pain point of deviation between renovation renderings and actual outcomes, and precisely matching the current public demand for refined home decoration.

The consumption upgrade is accelerating industry consolidation. New environmental regulations are phasing out outdated small and medium-sized production capacity, while modular quick-install building materials and one-stop turnkey services have become mainstream industry models. Compared to the weakness of national chain brands in delayed after-sales service across regions, local home decoration enterprises have deep roots in their areas for many years, familiar with local living environments and housing characteristics, with in-house design and construction teams capable of full-process implementation.

The industry still faces challenges such as rising costs from environmental upgrades, incompatibility between smart devices from different brands, and lack of unified standards for custom delivery. Relying on reliable quality and localized attentive service, regional brands are more likely to win consumer trust and effectively build differentiated competitive advantages.

Future competition in the home decoration industry will shift from price wars to comprehensive contests of quality, design, and service. As urban renewal continues to advance, the dividend of the old home renovation market will keep being released. Enterprises that combine eco-friendly products, custom design, and comprehensive local after-sales service will seize the initiative for development. In this window period of industry quality upgrading, home furnishing enterprises must adhere to the development direction of green, smart, and customized solutions, and deeply cultivate localized refined services, in order to achieve sustainable breakthrough in the stock market.

Source: sohu